Can One Spouse File Bankruptcy if the Other Does Not?

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Can one spouse file bankruptcy if the other does not?  Both spouses are not required to join in a bankruptcy. However, it is often, but not always, advisable for both spouses to file a joint bankruptcy. A joint bankruptcy filing will normally cost only slightly more than an individual filing. But if both spouses file separate bankruptcies the total cost — the legal fees and the filing fee — could double.

On the other hand, it is not helpful for the other spouse to file if

  1. There are no joint debts
  2. There is no jointly held property
  3. There are no assets likely to be lost in the filing of a single spouse and
  4. The other spouse does not have a significant amount of debt

The credit of the non-filing spouse would not be directly damaged by a separate filing of the other spouse.

If both spouses are responsible for a debt and one spouse secures a discharge of the obligation, the other spouse remains liable for the obligation. If all the debts are owed by just one spouse it will often be advisable for only the spouse with the debts to file bankruptcy. But there are exceptions to this rule. For instance, the other spouse may have guaranteed payment of some of the debts. There are a small number of instances in which one spouse may be responsible for a debt incurred by the other spouse (for example, family necessities or obligations in a legal separation). Or the actions of the filing spouse may have the effect of creating an obligation of the other spouse — as when a spouse rejects a lease signed by both spouses, leaving the non-filing spouse wholly responsible for the obligation.

If the spouse filing bankruptcy may lose property in the bankruptcy (See Will I Lose Any Property If I File Bankruptcy?) it might be helpful for the other spouse to join in the bankruptcy to increase the available exemptions — exemptions consist of property the debtor will be permitted to keep free from the claims of the bankruptcy trustee in a bankruptcy. The addition of a spouse may even double the exemptions available to the debtors.

There are two important caveats to this answer.

First, if the spouses reside in or formerly resided in a community property state, the answer to this question is much more nuanced.  Both the rights and obligations of a creditor against both spouses can be affected if just one spouse files — if community property is involved.  A bankruptcy attorney will have to respond to the details of your case if you or your spouse have resided in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin.

Second, sometimes it will be impossible for both spouses to file a joint bankruptcy. For instance, if one spouse filed a Chapter 7 within the preceding 8 years, that spouse would not be eligible to file another Chapter 7 case. In another situation, one spouse may owe more than was permitted for a Chapter 13 filer. Sometimes timing may dictate separate filings by the spouses on different dates, or one spouse may file a Chapter 7 while the other files a Chapter 13, 12 or even 11 — the bankruptcy of each spouse may have to be tailored to the different situations of the spouses.

Also, even if just one spouse files, some information about both spouses must appear on the bankruptcy forms. The non-filing spouse should be prepared to provide a list of all of the creditors, the nature of the claims, and the amounts. Income of both husband and wife, the source, and the amount will have to be reported. A list of all the properties of both filing spouse and non-filing spouse may also be required. Lastly, the filing spouse may need to supply information on their monthly expenses, such as food, shelter, clothing, taxes, utilities, medicine, transportation, and other expenses.

The filing spouse must provide a schedule of assets and liabilities, a schedule of unexpired leases and executory contracts, a schedule of income and expenditures, and a statement of financial affairs. Information for the whole household – including both spouses if they are living together – will be needed.

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